Recently, under the so-called "reciprocal tariff" executive order, the US announced that it will impose a 10% "minimum baseline tariff" on its trading partners and higher tariffs on some trading partners. This "reciprocal tariff" will take effect from April 9.
The 82.4% tariff means "transformation" in the lithium battery industry chain is imminent!
At this point, the cumulative tariff rate on China's lithium power battery exports to the US will reach 82.4%, a record high. Specifically, this rate is composed of multiple tariffs, including:
34% - "Reciprocal Tariff": This time, the US imposed a 34% tariff on all goods exported from China to the US, citing China's trade surplus with the US.
20% - Previously Imposed Tariff: From February to March 2025, the US imposed a 20% tariff on goods exported from China to the US for ***-related reasons.
3.4% - Baseline Tariff: The regular tariff rate on imported battery products in the US.
25% - Section 301 Tariff: This is a special tariff targeting China's new energy industry, which has been implemented on lithium batteries for electric vehicles imported from China since September 2024 and will expand to the ESS battery sector by 2026.
Industry insiders said that this tariff rate will lead to a significant decline in the price competitiveness of China's lithium power battery products in the US, shrinking profits for export enterprises, and forcing some companies to accelerate the adjustment of their overseas market strategies.
Meanwhile, although the comprehensive tariff rate on ESS batteries will rise to 82.4% by 2026, with the addition of the "reciprocal tariff," its comprehensive tariff rate will also reach a high of 57.4% from April 9, 2025, which may have a significant impact on the industry chain landscape in advance.
01
"Shock" in the New Energy Industry Chain is Inevitable
Analysts pointed out that the 82.4% high tariff directly targets the cost advantages of China's battery industry, attempting to weaken the competitiveness of China's battery industry in the US market through systematic barriers. However, this "tariff storm" is not a one-way strike, and the US new energy industry chain is also hard to escape the ripple effect of the tariffs.
Objectively, for Chinese battery companies, they are currently facing a dilemma: in the US market, if they maintain their original pricing strategy, their losses will be unbearable; if they choose to raise prices and pass on cost pressures, they face the risk of losing customers.
For the US new energy industry, although the US side stated that it wants to bring manufacturing back through "reciprocal tariffs," its new energy industry chain and supply chain are highly globalized, and it is not realistic to seek better alternatives to Chinese batteries and industry chain supply in the short term.
According to industry estimates, to meet the US market's demand for batteries, the construction of local battery capacity will take at least 3-5 years; local labor costs are high, and battery manufacturing costs are estimated to be 2-3 times that of China; the lack of battery materials and rising import costs will severely constrain the development of local new energy vehicles and ESS industries.
The local supply chain cannot be built overnight, and a significant tariff hike will cause the cost of imported auto parts and ESS batteries in the US to soar, reducing the competitiveness of vehicles and damaging the economic benefits of ESS projects.
Taking the ESS sector as an example, with advantages such as high safety, high performance, and low cost, top US ESS integrators have been purchasing Chinese ESS batteries on a large scale in recent years. However, the upcoming 57.4% tariff rate may cause some US ESS projects to face significant cost increases.
02
Chinese Companies' "Breakthrough" in Progress
In this storm, the global battery supply chain is accelerating changes, and Chinese companies may achieve "breakthroughs" in the following aspects.
Technically, since 2025, Chinese battery companies have accelerated the R&D and installation of solid-state batteries, and are expected to form new leading advantages and strong market competitiveness through generational advantages in the next wave of battery technology.
At the same time, sodium-ion batteries have shown a trend of increasing volume in China this year. As their mass application drives cost reduction through scale, the long-term manufacturing cost will be lower than that of lithium batteries, and they are expected to bypass lithium battery tariff restrictions in the future, opening up a new track for Chinese battery companies in the international market.
In terms of localization layout, Chinese battery industry chain companies are continuously advancing their localization strategies in the US.
Among them, CATL, in a technology licensing model, is cooperating with Ford to build a battery factory in the US, planning to produce LFP batteries.
Gotion High-tech, in addition to orderly advancing its lithium battery project in Illinois, US, also plans to build another battery factory and a battery material factory in the US.
Based on the CLS global cooperation business model, the battery factory jointly invested by EVE, Cummins, Daimler Trucks, and PACCAR started construction in the US in 2024. The factory has a planned annual capacity of about 21GWh and is expected to start shipping in 2026. The prismatic LFP batteries produced will mainly be used in the designated North American commercial vehicle field.
Hithium also announced in 2024 that it will invest in the construction of an ESS battery module and system integration factory with an annual capacity of 10GWh in Mesquite, Texas, US; in the same year, its Fremont marketing center in the US was officially launched.
In September 2024, REPT Battero's US subsidiary opened in Irvine, California, accelerating its globalization strategy.
In addition to battery companies, material company Wanrun New Energy also disclosed in September 2024 that its wholly-owned subsidiary plans to invest in the "Wanrun New Energy US New Energy Cathode Material and Industrialization R&D Center Project." The project has a planned annual capacity of 50,000 mt of LFP, with the first phase of 9,000 mt/year.
In terms of diversified business models, some Chinese companies are focusing on local battery recycling business in the US to "source locally" in the future, thereby avoiding related raw material import restrictions.
Other industry insiders pointed out that the "battery leasing + ESS service" model has emerged in China. Through innovative models such as shared ESS and ESS leasing, while lowering the investment threshold for ESS owners, it maximizes the utilization rate of ESS equipment. Combined with exports, this model can transform battery exports into service exports, and its end-of-life batteries can also be recycled and reused locally.
In addition, the already popular EV battery swapping model in China, if it finds suitable application scenarios in the US market, also has good development potential.
03
"Don't Put All Eggs in One Basket"
It should be mentioned that the US is imposing tariffs on all countries this time, especially on Southeast Asian and South Asian countries such as Vietnam, Thailand, India, Indonesia, and Malaysia, with high "reciprocal tariffs" of 24%-46%, which brings greater challenges to the previous "detour" export route of Chinese battery companies to the US. It is expected that more and more companies will actively expand the practical application scenarios of global diversified markets outside the US.
In fact, at the beginning of this year, CATL and BYD respectively obtained large ESS projects/orders of 19GWh in the UAE and 12.5GWh in Saudi Arabia, which is evidence of the diversified market layout of Chinese companies.
According to incomplete statistics, in recent years, Chinese battery companies have been laying out production capacity in multiple overseas markets:
CATL's German factory has been put into production, and its Hungary and Spain factories are also under construction/preparation; AESC has planned its Spanish factory; EVE is actively building its Hungary battery factory, and its Malaysia battery factory was put into production in Q1 this year; Farasis Energy's Turkey factory has been put into production; Gotion High-tech stated in December 2024 that it plans to invest in Morocco and Slovakia respectively to build annual 20GWh high-performance lithium battery and supporting projects, and its US project is progressing in an orderly manner.
In terms of the market, against the background of high "tariff barriers" in the US market, Southeast Asia, the Middle East, Europe, Australia, and South Africa are regarded as the "highlands" of global new energy market (ESS + power) growth.
Therefore, Chinese battery and industry chain companies may maintain higher business flexibility in the future, further building a global diversified market supply landscape to continuously improve their industrial development resilience.
Under this "tariff storm," US consumers may have to pay tens of thousands of US dollars more for purchasing electric vehicles, and ESS owners will also have to bear the results of project delays and cost increases; the construction of the global new energy industry supply chain will be severely affected. The US attempts to reshape its new energy industry rules by setting tariff barriers, while Chinese companies will respond with technological iterations, localization strategies, and diversified layouts. This "offensive and defensive game" may continue to rewrite the global new energy industry supply chain and industry chain landscape.
Notes: This news is sourced from http://www.cbea.com/djgc/202504/634915.html and translated by SMM.
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